InfuSystem Holdings Reports 14% Revenue Increase and $3.2 Million of Adjusted EBITDA for the Second Quarter of 2010
MADISON HEIGHTS, MI--(Marketwire - August 5, 2010) - InfuSystem Holdings, Inc. (
Revenue for the second quarter ended June 30, 2010 was $10.5 million, a 14% improvement compared to $9.2 million for the same period in 2009. The increase in revenue was predominantly the result of maturation of new accounts signed during the past several months combined with continued growth of new customers gained during the period.
Mr. Sean McDevitt, Chief Executive Officer, commented, "In the second quarter we continued to experience growth in our ambulatory infusion business. With our recent milestone acquisition of First Biomedical, Inc., InfuSystem has successfully broadened our service offerings to our oncology customers and now serves an even larger infusion market, including outside of oncology. Furthermore, the acquisition diversifies our revenue sources and provides us with numerous complementary opportunities that will continue to fuel our strong organic growth. In addition, InfuSystem continues to explore additional complementary businesses as potential acquisition candidates to further bolster our long term growth prospects."
Financial Results for the Second Quarter 2010
Revenue for the second quarter ended June 30, 2010 was $10,487,000, a 14% improvement compared to $9,173,000 for the same period in 2009. The increase in revenues is primarily due to increased penetration at facilities added during the past few months, as therapies are initiated for more and more patients at these facilities, combined with the addition of new customer accounts won during the quarter.
Adjusted EBITDA for the second quarter ended June 30, 2010 was $3,171,000, a 3% improvement compared to $3,083,000 for the same period in 2009. The increase in EBITDA for the second quarter of 2010 was primarily due to higher gross profit, partially offset by higher provision for doubtful accounts and higher selling expenses. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and excludes gain (loss) on derivative financial instruments and stock-based compensation, and other non-recurring charges. Adjusted EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). The Company believes the presentation of Adjusted EBITDA is a relevant and useful measure to assist a reader's ability to understand the Company's operating performance. The Company's management likewise utilizes Adjusted EBITDA as a means to measure its operating performance. Reconciliation from Adjusted EBITDA, a non-GAAP measure, to net income can be found in the appendix.
The acquisition of First Biomedical in the final weeks of our second quarter had significant one-time impacts on our financial reporting. Operating loss for the second quarter of 2010 was ($254,000), compared to operating income of $1,344,000 for the same period in 2009. The decrease in operating income was primarily due to costs related to the recent First Biomedical acquisition, higher stock-based compensation expense and higher provision for doubtful accounts, partially offset by higher gross profit. Costs related to the acquisition of First Biomedical totaled approximately $785,000 in the second quarter. Net income for the second quarter of 2010 was $135,000 or $0.01 per diluted share, compared to net income of $2,760,000 or $0.15 per diluted share, for the same period in 2009. Net income for the second quarter of 2010 included a ($71,000) loss on derivative financial instruments, which was predominantly attributable to the change in the value of the Company's warrants, compared to a $2,006,000 gain on derivative financial instruments in the second quarter of 2009.
Total cash and cash equivalents were $3,016,000 at the end of the second quarter, compared to $7,750,000 at the end of 2009. As of June 30, 2010, InfuSystem had $34,246,000 of debt outstanding, compared to $24,141,000 at year end 2009. Both the decrease in cash and the increase in debt, as compared to year end 2009, are primarily related to the acquisition of First Biomedical and the refinancing of the Company's debt, partially offset by continued strong operating cash flows. The Company also had a $5,000,000 undrawn revolving credit facility in place at June 30, 2010.
Conference Call
The company will host an investor conference call today at 5:00 p.m. ET to discuss its financial results for the second quarter 2010. The investor conference call will be available via live webcast on InfuSystem's website at www.infusystem.com in the Investors section. To participate by telephone, the dial-in number is (888) 713-4485. The access code is 9667934. Investors are advised to dial into the call at least ten minutes prior to the call to register. A replay of the call can be accessed by dialing (888) 203-1112, confirmation number 9667934. An online archive of the conference call will remain on the Company's website for at least 90 days after the call.
About InfuSystem Holdings, Inc.
InfuSystem is the leading supplier of infusion services to oncologists and other outpatient treatment settings. The Company provides pole mounted and ambulatory pumps, supplies and related clinical, biomedical and billing services to practices and patients, nationwide. The Company's unique suite of services appeals to practices, patients and payors by improving access to clinically necessary medical equipment, while driving down costs and maximizing clinical outcomes.
Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include general economic conditions, as well as other risks detailed from time to time in InfuSystem's publicly filed documents.
INFUSYSTEM HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(in thousands, except share data) 2010 2009
------------- -------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 3,016 $ 7,750
Accounts receivable, less allowance for
doubtful accounts of $2,178 and $1,842 at
June 30, 2010 and December 31, 2009,
respectively 7,459 5,517
Inventory 1,650 925
Prepaid expenses and other current assets 614 395
Deferred income taxes 255 125
------------- -------------
Total Current Assets 12,994 14,712
Property & equipment, net 16,994 13,499
Deferred debt issuance costs, net 804 781
Goodwill 64,068 56,580
Intangible assets, net 34,312 28,911
Other assets 286 207
------------- -------------
Total Assets $ 129,458 $ 114,690
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,893 $ 1,306
Other current liabilities 2,219 1,573
Derivative liabilities 750 2,670
Current portion of long-term debt; December
31, 2009 includes $4,928 payable
to Kimberly-Clark (I-Flow) 5,011 5,501
------------- -------------
Total Current Liabilities 9,873 11,050
Long-term debt, net of current portion;
December 31, 2009 includes $16,757 payable
to Kimberly-Clark (I-Flow) 29,235 18,640
Deferred income taxes 5,354 3,314
Other Liabilities 488 221
------------- -------------
Total Liabilities $ 44,950 $ 33,225
------------- -------------
Stockholders' Equity
Preferred stock, $.0001 par value: authorized
1,000,000
shares; none issued - -
Common stock, $.0001 par value; authorized
200,000,000; shares; issued and
outstanding 19,869,239 and 18,734,144,
respectively 2 2
Additional paid-in capital 84,330 81,410
Retained earnings 176 53
------------- -------------
Total Stockholders' Equity 84,508 81,465
------------- -------------
Total Liabilities and Stockholders' Equity $ 129,458 $ 114,690
============= =============
INFUSYSTEM HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended June
June 30, 30,
---------------------- ----------------------
(in thousands, except per
share data) 2010 2009 2010 2009
---------- ---------- ---------- ----------
Net revenues $ 10,487 $ 9,173 $ 21,421 $ 18,400
Operating expenses:
Cost of Revenues --
Product and supply costs 1,719 1,384 3,394 2,654
Cost of Revenues -- Pump
depreciation and
disposals 1,248 894 2,387 1,734
Provision for doubtful
accounts 1,076 875 2,469 1,844
Amortization of
intangibles 534 457 991 914
Selling and marketing 1,595 1,419 3,036 2,739
General and
administrative 4,569 2,800 7,905 5,910
---------- ---------- ---------- ----------
Total Operating Expenses 10,741 7,829 20,182 15,795
---------- ---------- ---------- ----------
Operating (loss) income (254) 1,344 1,239 2,605
Other (loss) income:
(Loss) gain on
derivatives (71) 2,006 (460) (636)
Interest expense (1,366) (851) (2,172) (1,837)
Other income 1,118 - 1,118 -
---------- ---------- ---------- ----------
Total other (loss)
income (319) 1,155 (1,514) (2,473)
---------- ---------- ---------- ----------
(Loss) income before
income taxes (573) 2,499 (275) 132
Income tax benefit 708 261 398 121
---------- ---------- ---------- ----------
Net income 135 2,760 123 253
---------- ---------- ========== ==========
Net income per share:
Basic 0.01 0.15 0.01 0.01
Diluted 0.01 0.15 0.01 0.01
Weighted average shares
outstanding:
Basic 19,798,719 18,566,748 19,353,638 18,549,389
Diluted 20,811,813 18,943,962 19,922,468 18,915,995
INFUSYSTEM HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30
--------------------
(in thousands) 2010 2009
--------- ---------
OPERATING ACTIVITIES
Net Income 123 253
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on derivative liabilities 460 636
Gain on extinguishment of long-term debt (1,118) -
Provision for doubtful accounts 2,469 1,844
Depreciation and loss on disposal of pumps 2,559 2,093
Amortization of intangible assets 991 914
Amortization of deferred debt issuance
costs 834 264
Stock-based compensation 997 545
Deferred income taxes (814) 787
Changes in assets and liabilities,
exclusive of effects of acquisitions:
Increase in accounts receivable, net of
provision (2,682) (2,653)
Increase in other current assets (318) (1,317)
Increase in other assets (906) (511)
Increase in accounts payable and other
liabilities 1,134 657
Decrease in derivative liabilities from
termination of interest rate swap (365) -
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,364 3,512
--------- ---------
INVESTING ACTIVITIES
Capital expenditures (743) (2,672)
Cash paid for acquisition, net of cash
acquired (16,418) -
Proceeds from sale of property - 1
Other assets - (18)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (17,161) (2,689)
--------- ---------
FINANCING ACTIVITIES
Principal payments on term loan (20,568) (6,929)
Cash proceeds from term loan 30,000 -
Common stock repurchased to satisfy
statutory withholding on
Stock-based compensation (38) -
Principal payments on capital lease
obligation (331) (43)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 9,063 (6,972)
--------- ---------
Net change in cash and cash equivalents (4,734) (6,149)
Cash and cash equivalents, beginning of
period 7,750 11,513
--------- ---------
Cash and cash equivalents, end of period 3,016 5,364
========= =========
INFUSYSTEM HOLDINGS, INC.
GAAP RECONCILIATION
(UNAUDITED)
Reconciliation from Net Income to Adjusted EBITDA
Three Months Six Months
Ended Ended
June 30, June 30,
---------------- ----------------
2010 2009 2010 2009
------- ------- ------- -------
Net Income $ 135 $ 2,760 $ 123 $ 253
Adjustments:
Interest expense 1,366 851 2,172 1,837
Income tax benefit (708) (261) (398) (121)
Depreciation 1,209 1,015 2,380 1,886
Amortization 534 457 991 914
------- ------- ------- -------
EBITDA $ 2,536 $ 4,822 $ 5,268 $ 4,769
------- ------- ------- -------
Adjustments:
Loss (gain) on derivatives 71 (2,006) 460 636
Stock based compensation 897 267 997 545
Acquisition costs 785 - 785 -
Gain on debt extinguishment (1,118) - (1,118) -
------- ------- ------- -------
Adj. EBITDA $ 3,171 $ 3,083 $ 6,392 $ 5,950
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CFO
InfuSystem
(248) 291-1210
Investor Contacts:
Asher Dewhurst
Bob East
Westwicke Partners
Email Contact
Tel: (443) 213-0500
Released August 5, 2010
